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Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT Accounting 0% HR West 0% 10% 20% 0% 10% East 40% 40% 40% 60% 60% 20% The direct costs of the service departments in the previous period were $90,250 for IT, $113,000 for Accounting, and $147,500 for HR. Required: Use the step method to allocate the service department costs to the two production departments. Allocate HR costs first, followed by IT, and then Accounting. Note: Amounts to be deducted should be indicated by a minus sign. Service department costs HR allocation IT Accounting HR West East IT allocation Accounting allocation Total costs allocated $ 0 $ 0 $ 0 $ 0 $ 0

Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT Accounting 0% HR West 0% 10% 20% 0% 10% East 40% 40% 40% 60% 60% 20% The direct costs of the service departments in the previous period were $90,250 for IT, $113,000 for Accounting, and $147,500 for HR. Required: Use the step method to allocate the service department costs to the two production departments. Allocate HR costs first, followed by IT, and then Accounting. Note: Amounts to be deducted should be indicated by a minus sign. Service department costs HR allocation IT Accounting HR West East IT allocation Accounting allocation Total costs allocated $ 0 $ 0 $ 0 $ 0 $ 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT Accounting 0% HR West East 0% 10% 20% 0% 10% 40% 40% 40% 60% 60% 20% The direct costs of the service departments in the previous period were $90,250 for IT, $113,000 for Accounting, and $147,500 for HR. Required: Use the step method to allocate the service department costs to the two production departments. Allocate HR costs first, followed by IT, and then Accounting. Note: Amounts to be deducted should be indicated by a minus sign. Service department costs HR allocation IT Accounting HR West East IT allocation Accounting allocation Total costs allocated $ 0 $ 0 $ 0 $ 0 $ 0
Transcribed Image Text:Memorial Services, Incorporated (MSI) has three service departments (IT, Accounting, and HR) and two production departments (West and East). The usage data for each of the service departments for the previous period follow: IT Accounting HR IT Accounting 0% HR West East 0% 10% 20% 0% 10% 40% 40% 40% 60% 60% 20% The direct costs of the service departments in the previous period were $90,250 for IT, $113,000 for Accounting, and $147,500 for HR. Required: Use the step method to allocate the service department costs to the two production departments. Allocate HR costs first, followed by IT, and then Accounting. Note: Amounts to be deducted should be indicated by a minus sign. Service department costs HR allocation IT Accounting HR West East IT allocation Accounting allocation Total costs allocated $ 0 $ 0 $ 0 $ 0 $ 0
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